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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Plutus Powergen Plc | LSE:PPG | London | Ordinary Share | GB00B1GDWB47 | ORD 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.025 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMPPG
RNS Number : 8936R
Plutus PowerGen PLC
31 October 2019
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR').
Plutus PowerGen Plc / Ticker: PPG / Index: AIM
31 October 2019
PLUTUS POWERGEN PLC
("Plutus", the "Group" or the "Company")
Final Results
Plutus PowerGen (AIM: PPG) the quoted power company focused on the development and operation of flexible energy generation ('FlexGen') projects in the UK, announces its results for the year ended 30 April 2019.
Copies of the Annual Report and Accounts for the year ended 30 April 2019 will shortly be posted to shareholders and will be available on the Company's website (www.plutuspowergen.com) shortly.
2019 Highlights
This year, we have been concentrating on the operations of our 120MW of FlexGen sites and seeking finance for our planned portfolio of gas peakers
-- Continued focus on the operation of flexible power generation facilities in the UK to mitigate the current and forecast risk of an energy deficit
-- All six sites hit the TRIADs available to them and generated cash which was largely applied to adjusting emissions from the generators to comply with the medium combustion plant directive ("MCPD")
-- Appointed DWPF Ltd ("DWPF") as formal intermediary to assist in securing the equity portion within Special Project Vehicles ("SPVs") for the contemplated gas site portfolio
-- Gas site being developed with Rockpool to be held in the last three co-investee companies
-- Post year end, a Collaboration Agreement has been signed with an infrastructure fund in the energy generation space whereby investment in projects will be assessed on a case by case basis for an initial 80MW
-- The European Commission has recently approved Britain's Capacity Market scheme following an in-depth investigation into its state aid compliance which is good news for us and the whole industry
Chairman's Statement
Year to 30 April 2019
The past year has been challenging in many ways, notwithstanding the continued operating success, despite the tougher climate for FlexGen in the UK and for our 120MW of FlexGen sites co-owned with Rockpool Investments LLP ("Rockpool"). We are frustrated on an ongoing basis by inconsistent inter departmental government policies including BEIS (The Department for Business, Energy and Industrial Strategy) and DEFRA; judicial reviews and ongoing Ofgem industry reviews and what appears to be no coherent or cohesive energy policy in the UK. The Capacity Mechanism was, until 24 October 2019, in abeyance in the UK despite the government's continued belief that the Capacity Market ('CM') is the right mechanism for delivering security of supply at the lowest cost to the consumer.
I am pleased to report however that, post the year end on 24 October 2019, The European Commission ("EC") has finally approved Britain's CM scheme following an in-depth investigation into its state aid compliance. The mechanism was suspended last year following a landmark ruling, which found that the EC had erred on procedural grounds in granting state aid approval back in July 2014. The industry expects that the Capacity Market will be reinstated shortly, with outstanding payments held back by the scheme's suspension now free to be paid in full. Attention will now immediately turn to forthcoming auctions. Three are scheduled to take place between late January and early March 2020. The Capacity Market is, however, not quite out of the woods yet. While it may now be a formality, it is still the subject of a High Court hearing in November after Tempus Energy escalated its case against the Department for Business, Energy and Industrial Strategy back in March 2019.
The energy mix is changing rapidly in the UK, with an increasing amount of intermittent energy coming online. Additionally, the government continues to be obstructing its efforts to fund the building of nuclear power stations and it is highly unlikely the ageing UK portfolio will be renewed in time. There still exists some legacy coal fired power stations, which will close as soon as the capacity in the UK is sufficient to meet demand at all times. There is a large portfolio of gas fired power stations in the UK, small amounts of hydroelectric, battery and other storage and back-up power and there are inter-connectors with Europe; I wonder where we will be with the latter when or if the UK finally leaves the EU.
The power industry increasingly needs back up at peak times, given the UK power generation mix and factors outlined above together with which we continue to be frustrated at the local planning level for our policy of developing gas "peakers". Is it better to have brownouts or blackouts in the UK which is not necessarily taken into consideration in the grander scale of energy needs in the UK at the local level? In November 2018, BEIS and Ofgem launched a joint review to investigate what policy, legal and regulatory changes might be needed to ensure that the energy retail market is fit for the future; we look forward to the publication of this review, which we hope will be positive for our industry.
OFGEM said recently in its Smart Systems and Flexibility Plan progress update, 'Flexibility is increasingly central to this transforming system. Technologies and applications such as storage and demand response can help balance generation with demand and provide essential services to the grid. This can facilitate the deployment of weather-dependent renewables such as solar and wind, whilst enabling greater uptake of new types of demand such as electric transport."
External factors affecting our business
I thought it would be useful for the understanding of our shareholders to outline what has affected our sector and consequently our business in the past few years so I am quoting extracts from our previous annual reports and accounts, with comments on each, to demonstrate that almost every part of our industry has been undermined in some way by various governmental policies and that this is the difficult climate in which we have been forced to operate despite the efforts of the directors of Plutus.
1) In 2014, Capacity Mechanism was introduced which was a new market and not one we had planned for when we initially decided to enter the FlexGen market, where the company is able to compete in the annual capacity auction to receive 15-year contracts for the construction of new generation capacity. In its first two years, this auction cleared at an average of circa GBP20,000 per MW for our sites for payment commencing 4 years from award. These payments are index-linked from award. We have been successful in securing some valuable CM contracts for our six FlexGen sites at an average of around GBP20,000 per MW per annum.
- We were delighted by this at the time as this had not been in our original plans but without it now, considering the other negative factors detailed below which have adversely affected our industry, no capacity would be built in our sector.
2) In October 2015, the UK Government announced at a Public Bill Committee which outlines amendments to the Enterprise Investment Scheme ('EIS') funding to exclude activities that involve the provision of reserve power capacity and generation, for example under a Capacity Market agreement or Short Term Operating Reserve contract. The UK Government noted that such activities are generally asset-backed and benefit from a guaranteed income stream and mainstream financing, which removes the need for tax-advantaged investment. This change will apply to investments made on or after 30 November 2015.
- This has meant that our planned initial ten 20MW EIS funded sites with Rockpool had to be curtailed to nine sites with no prospect of partnering with them for further sites which had been part of our plans.
3) In March 2016, the UK Government consulted on reforms to the Capacity Market ("CM") including a set of questions on a proposal to avoid over-compensation in connection with certain risk finance schemes i.e. EIS schemes from which the nine operating companies benefitted. To ensure the amount of aid under the CM is limited to the minimum needed and that there is no cumulation or over-compensation, the total amount of aid (i.e. the total aid received under the risk finance schemes e.g. EIS and the total aid received under the CM) should not exceed the amount awarded in the CM auction. Therefore, the amount of EIS relief granted to investors should be offset against our CM receipts.
- Clearly the UK Government was unable to differentiate between the shareholders of the business and the company itself operating the businesses funded by EIS investors, the latter having to pay for the tax benefit of the former via deductions from CM payments which have now been suspended in any event. The investee companies took such necessary actions that were possible to mitigate this adverse financial affect to the nine companies.
4) In April 2016, we responded to a Department of Environment and Climate Change ("DECC") consultation on reforms to the Capacity Market, in which it confirmed that The Office of Gas and Electricity Markets ("Ofgem") had been asked to review network charging rules and their impact on embedded generation. DECC suggested that current charging arrangements could be providing undue reward to distribution-connected generators. The regulator was scheduled to report back with a proposed way forward. Separately, National Grid was undertaking its own review into embedded benefits, and the Department for Environment, Food and Rural Affairs ("Defra") was reviewing emissions as part of the UK's adoption of the Medium Combustion Plant Directive (MCPD).
- Please see below for the negative effects of the results of the reviews, both of which negatively affect our industry sector substantially.
5) In March 2017, Ofgem published a 'minded to' decision, which it confirmed. From the winter of 2020/21, this would reduce the embedded benefits received by distribution connected generators such as PPG to the residual charge. While this change settles down, there is concern among industry participants that price volatility will increase, which in turn will lead to higher energy prices. Additionally, third party analysis indicates that generators generating for the TRIAD market have acted to depress volatility over the winter -or peak demand - months. Consequently, the 2017 TRIAD "season" (from 1 November to 28 February each year) was the last 100% TRIAD and this falls to 66% in winter 2018 and 33% in winter 2019. However, there are still monies to be received from "locational payments" and as we are located, and intend to locate, in the best and highest yielding locations, we expect to receive around 20% of the original TRIAD.
- By abolishing the way by which the grid was paid for decades for the use of its network via TRIADs, this removed the single biggest income source for the operating companies. We were pleased that, before it was suspended, at least we had Capacity Market income on a T+1 and a T+4 basis. We also hoped that other markets such as FR, FFR and STOR would firm
6) The outcome of DEFRA's consultation on lower emissions limits was delayed by the June 2017 general election until the third quarter of that year, where we are able to comply with the proposed new rules from cash generated from operations. The outcome in relation to the transposition into UK law of the Medium Combustion Plant Directive (MCPD) will require us to fit selective catalytic reduction (SCR) or other measures to reduce the NOx from our FlexGen portfolio
- The result of the review has cost between GBP300,000 to GBP500,000 per site, which will mean that we are unable to pay down any debt in the past year from the declining TRIAD income.
7) On 15 November 2018, the General Court of the European Union issued a judgment on Case 793/14 Tempus Energy Ltd and Tempus Energy Technology V Commission, funded by Greenpeace, annulling the Commission's original State aid decision to approve a capacity mechanisms scheme for Great Britain. The General Court ruled that the Commission should have initiated the formal investigation procedure before adopting a decision. This judgment renders aid granted through the scheme unlawful. As a result, the UK Government decided to suspend the capacity market, meaning that it will not grant new associated subsidies until it is newly decided if they are compliant with EU law. However, in December 2018, the UK Government confirmed that it will operate the capacity market as normal, but without payments being made to agreement holders. The UK Government also confirmed that it intended to hold a replacement T-1 auction for the delivery year 2019/2020, which would be held by rearranging the postponed T-1 auction that had been scheduled for January 2019. In the meantime, the Commission lodged an appeal against the General Court's judgment before the Court of Justice on 25 January 2019. It also initiated the formal investigation on 21 February 2019 in order to adopt a new decision. BEIS said, "We will robustly defend this challenge. We continue to believe in the Capacity Market as a mechanism for guaranteeing security of supply...We welcome the Commission appealing the Court's judgment - an appeal in which the UK is intervening to support the Commission." The date for the hearing has been arranged for 12-15 November 2019.
- Therefore, until the recent EC approval of the UK's CM scheme, we would not have been expecting to receive T+4 capacity payments due to Attune Energy this coming year or any other T+1 payment. This has reduced our ability to sell the sites which had been the original intention. It has had an adverse effect on our market for obtaining funding and refinancing. It is not as relevant to the gas peaker sites but has made everything in our sector more difficult.
In addition, post year end, on 22 July 2019, BEIS announced a consultation on Proposals for Capacity Market emissions limits in order to implement the Clean Energy Package provisions in respect of limits on carbon dioxide emissions from refurbishing and existing generation (likely to be coal, diesel and inefficient gas) to ensure any such generating capacity that does not meet the emissions limits shall not, from 1 July 2025, receive any capacity payments. The consultation will be open until 6 September 2019. We look forward to a reasonable and positive outcome from this consultation.
Essentially, if you take all of these items above into account, just about every major revenue stream for the Plutus investee companies has been adversely affected. Whilst this does not affect our results as our sites are held as investments, it is extremely frustrating for shareholders and directors alike. A combination of the various reviews and ongoing industry reviews has led to material uncertainties in the market. Against this background, we are pleased to have found an infrastructure fund investment partner that will fund us on a case by case basis for gas peaker sites.
Key areas of focus
We currently have investments in six 20MW FlexGen sites successfully operating with our investment partner, Rockpool. As announced on 29 August 2019 the Company received notice on 27 August 2019 of termination from the non-executive directors of Rockpool that its management of these six sites is to be terminated on a six month notice period. All six sites hit the TRIADs available to them during the winter period and the revenue from that alone, of around GBP3 million, will be used to pay down construction debt and ultimately enhance the value attributable to shareholders when the sites are eventually sold. Each site has had to spend a considerable amount of money to lower its emissions so that they may operate successfully within the new emissions policies. Our primary operational focus has therefore been on the continued operation of these six sites in which we have an economic interest of circa 44.5% each and will continue to be until the third week of February 2020 and on an ongoing basis for Attune Energy Limited (Plymouth) as detailed in the Chief Executive's review below. This coming winter, following OFGEM's review of TRIADs, we expect to achieve 33% of the original income from TRIADs, essentially 50% lower than last year, into each investment. This is assuming we hit all the TRIADs, which will again be applied to paying down the development debt of each company. Each investee Company will also continue to generate revenue from the sale of electrons, and income from bidding for FFR (Firm Frequency Response) or FR (Fast Response).
If alternative performance measures were used and included our share of the nine companies co-owned with Rockpool, our unaudited net assets from the operating companies alone would be at least GBP7.7m greater than disclosed in the balance sheet. Our share of the profit from the six operating sites, would have added GBP2.78m to our turnover and GBP835,000 EBITDA to our income statement.
Plutus is continuing to concentrate on obtaining funding for our intended portfolio of gas fuelled power generation sites, "gas peakers" that will only operate in peak hours generally for between 1500 to 2500 hours per year when it is profitable to do so. The management team has been working to develop and progress a pipeline of gas-powered sites in which we intend to hold a majority stake, and therefore be permitted to consolidate the income statement and balance sheet into our accounts, providing more visibility at Group level of our operations.
Strategy and financing
In late August 2019, post year end, we were pleased to announce a Collaboration Agreement had been signed with an FCA regulated and accredited investment adviser whose leadership team has a strong track record in sizeable civil project funding in the energy generation space and has recognised the potential of the Plutus portfolio, understands the current UK power dynamics and the need for UK peaker sites. Plutus has agreed to give the counterparty to the Collaboration Agreement a first right of refusal on the funding for both its proposed as well as its contemplated gas site portfolio on an ongoing basis. The new funding for the peaker gas sites will be provided on a site-by-site basis and is subject, inter alia, to completion of full due diligence and investment committee approval. Plutus and the counterparty intend to work together to initially develop and fund a pipeline of four identified projects totalling c.80MW and the counterparty has been granted exclusivity over these projects until 31 December 2019. The counterparty and Plutus intend to agree heads of terms for each project.
The role of Plutus in the development of these projects is expected to cover Plutus being responsible for: (i) continuing the development and evaluation of these sites in respect of planning, other consents and power and gas connections; (ii) inputting into the technical solution at each site, assembling appropriate professional teams and developing draft contractual documentation with key counterparties; and (iii) developing a standard project operating contract under which Plutus will subcontract certain key services in respect of merchant trading and plant maintenance.
The gas site portfolio will run Merchant, i.e. within day, day ahead and balancing mechanism markets. Moreover, the Company is in talks regarding support of asset financing to complement equity funding.
Cash at 30 April 2019 was GBP45,177 and the Group is currently owed to 31 October 2019, through its subsidiary Plutus Energy Limited, GBP625,000 in accrued and deferred fees from the Group's six co-invested companies. The Company's current cash resources remain limited and the working capital position of the Group remains constrained. As announced on 30 May 2019 the directors remain confident that they have sufficient resources under the current cash burn to implement their current plans and are implementing a cost control strategy including not drawing salaries. Further details on the Group's financial position is outlined in the Financial Review section below.
Dividend
We do not propose to pay a dividend for the foreseeable future.
Outlook
I would like to thank our staff and Directors for their valued efforts, as well as our partners and advisors who provide their expert support assisting our operations. We are making good progress with financing, as reported above, and we look forward to securing sufficient finance to commence building up our gas sites with our infrastructure funding partner. We look forward, against an uncertain industry back drop, to a solid future once we have been able to sell our FlexGen assets and secure the finance for our planned gas peaker portfolio.
Charles Tatnall
Executive Chairman
31 October 2019
Chief Executive's Review
Operations
The year ended 30 April 2019 has again been a challenging one, however all our investments have operated successfully and profitably in the year under review albeit at a reduced level of profit due to TRIADs being restricted to 66% of their original level. There were also less spikes in the market to take advantage of due to a mild winter and consequently lower demand at peak periods If non-IFRS alternative reporting measures were applied, our share of the profit from the six operating sites would have added GBP2.78m to our turnover and GBP835,000 EBITDA to our income statement, under the same measures.
We were pleased to report that all six of our 20MW operating sites were called upon and utilised on Friday 9 August 2019 in response to the outages of two power stations on that day. The Company's sites are automatically turned on when the grid frequency drops below a certain level under the Firm Frequency Response Scheme ('FFR'), under which the Company receives payment in return for its availability. We continue to believe that with the squeeze in overall capacity in peak periods together with the growing percentage of intermittent power in the UK power generation mix, such occasions will become more frequent, particularly on winter evenings and when turbine energy is not being generated.
In a public statement, the UK National Grid has said it will "learn the lessons" after nearly one million people across England and Wales lost power on Friday 9 August. Subsequent to the power outage, Business Secretary, Andrea Leadsom MP, has requested that the Energy and Emergencies Executive Committee undertake an investigation aimed at assessing whether National Grid's procedures are "fit for purpose". Additionally, the regulator Ofgem has demanded an "urgent detailed report" into the events and failures that led to the power outage. The impact of Friday's power outage was widespread, and the impact included hospitals; for example, a back-up generator at Ipswich Hospital, which was supposed to supply power to outpatient areas, did not work as expected. Around 300,000 UK Power Networks customers were affected in London and the South-East while Western Power Distribution said around 500,000 people were affected in the Midlands, South-West and Wales; other regions across the UK were also affected.
On 3 September 2019, post year end, the application for planning permission for the development of a double gas-powered site in the South West of England was rejected by East Devon District Council on the grounds of perceived poor air quality as follows:
The Council hereby refuses permission to carry out the development described in the application and the plans attached thereto for the following reasons:
1. The proposed development does not represent a renewable or low carbon energy project and is located within the countryside. As such, and given that any benefits from the proposal are outweighed by the harm created through development in the countryside of a power generator reliant upon fossil fuels at a time when there is a need to lower carbon emissions and move towards renewable sources of energy, the application is contrary to adopted Local Plan Strategies 1, 3, 5, 7, and 39, adopted Local Plan Policies D1 and EN13, and guidance within the NPPF.
2. The proposed development, by reason of the potential for pollution of the atmosphere, fails to satisfactorily demonstrate that it will not result in an unacceptable impact upon nearby residents or the wider environment. As such, the proposal is contrary to Policy EN14 of the adopted East Devon Local Plan 2013-2031.
This was a major disappointment for Plutus. I also detail below the report that our planning consultant, Alan Hannify of Union4planning sent to us following the planning rejection.
"The application went to yesterday's Committee with a recommendation for approval. There were no objections from any of the officers within the Council or other consultees. However, there were objections from members of the public and the Parish Council and it would appear that opposition to the application grew over the past week. The Committee meeting was scheduled for 10am and it was evident from 9:15am onwards that there would be large turnout at the Council building. The Council chamber was full, with some of the crowd having to stand or view proceedings from the gallery. The application was presented by the Development Manager, Chris Rose. I thought he did well in explaining the merits of the proposal, the rationale for the technology and the reasons for officers making a positive recommendation.
Chris Rose's presentation was followed by four speakers who were registered as objectors to the application. The speakers were Dan Seale, Michael Best, David Whitton and Jim Haywood who is a Professor of Atmospheric Science at the University of Exeter. Professor Haywood was not registered on the speaker list published on the Council's website on Monday, but my understanding is that he spoke on behalf of Janice Owen. Each of the objectors focused on a particular theme - the impact of the proposal on the move to a low carbon economy; the differing mechanisms that exist within the STOR and Capacity Markets; noise impacts; and air quality impacts. The aforementioned objectors were followed by Richard Ball from the Parish Council who reiterated the Parish Council's objections and raised a series of other points which they had not set out in their consultation response to the Council. There were a number of points made by the objectors that I would consider to be factually incorrect. For instance, it was stated that the installation would operate for over 15 hours per day and that this would mean that it would be operational for 5,500 hours per year. Professor Haywood claimed that the Air Quality Assessment only considered areas within 1km of the site. However, the Air Quality Assessment was based on modelling over a distance of approximately 4km.
I then had an opportunity to make my statement in support of the application and this was followed by a couple of questions from councillors. The first question sought clarification regarding the annual operating hours and the second question with regard to the 25-year lifetime of the installation. The ward councillors, Geoff Jung and Ben Ingham then spoke in opposition to the application and both cited the air quality analysis undertaken by Professor Haywood as evidence of the significant impacts that would arise as a result of the development.
The Council's legal officer advised the Committee members that the Council only received Professor Haywood's document last Friday and that the initial feedback from the Environmental Health Team was that they didn't have the requisite expertise to examine all of the information provided. On this basis, the legal officer advised that he felt it may be prudent for the Committee members to defer the application, so the additional information from Professor Haywood could be fully assessed. Notwithstanding this, the Committee members moved to vote on the application, with Councillors Paul Arnott, Paul Hayward and Eileen Wragg prominent in voicing their opposition to the proposal. The Committee members voted 10 to 3 to refuse the application, with the following reasons for refusal to be provided:
That the development is in the countryside and is contrary to Strategy 7 of the Local Plan. That the development would give rise to unacceptable levels of noise and air quality pollution and would be contrary to Policy EN14 of the Local Plan. The Council's legal officer reiterated his concern that members were making a Decision without having a full understanding of the additional information submitted, and that this was of particular concern in respect of the second reason for refusal. I have now obtained a copy of the document sent by Professor Haywood to the Council (please find attached).
In summary, it was an extremely disappointing and incredibly frustrating Committee."
The Board is extremely disappointed by this rejection and is considering all options available, including, but not limited to, an appeal. We have however decided to write off all costs associated with this application to date, around GBP110,000. The Board remains confident in its FlexGen strategy of bringing online further high margin gas operations and has a pipeline of other prospective peaker sites.
Post the year end, after many months of hard work and effort by the board of directors, on 29 September the Company entered into a collaboration agreement (the 'Collaboration Agreement') for the equity funding portion of its proposed initial 80MW and contemplated further portfolio of 160MW of peaker gas sites in the UK. The Collaboration Agreement has been signed with an FCA regulated and accredited investment adviser and managers of an infrastructure fund whose leadership team has a strong track record in sizeable civil project funding in the energy generation space and has recognised the potential of the Plutus portfolio, understands the current UK power dynamics and the need for UK Peaker sites. Plutus has agreed to give the counterparty to the Collaboration Agreement a first right of refusal on the funding for both its proposed as well as its contemplated gas site portfolio on an ongoing basis which currently totals 240 MW.
The Company anticipates that it will maintain a majority equity interest in its portfolio of gas-powered peaker sites, which the Board expects to be ultimately significantly larger than its interests in the current six FlexGen and one gas site portfolio which have been funded by EIS investors through Rockpool Investments LLP ("Rockpool"). The new funding for the peaker gas sites will be provided on a site-by-site basis and is subject, inter alia, to completion of full due diligence and investment committee approval. Plutus and the counterparty intend to work together to initially develop and fund a pipeline of four identified projects totalling c.80MW and the counterparty have been granted exclusivity over these projects until 31 December 2019. The counterparty and Plutus intend to agree heads of terms for each project.
The role of Plutus in the development of these projects is expected to cover Plutus being responsible for: (i) continuing the development and evaluation of these sites in respect of planning, other consents and power and gas connections; (ii) inputting into the technical solution at each site, assembling appropriate professional teams and developing draft contractual documentation with key counterparties; and (iii) developing a standard project operating contract under which Plutus will subcontract certain key services in respect of merchant trading and plant maintenance. The gas site portfolio will run Merchant (i.e. within day, day ahead and balancing mechanism markets) which the Company recognises as a major advancement in progressing in the energy provision space. Moreover, the Company is currently in talks regarding support of asset financing to complement equity funding where we have expressions of interest and, as such, Plutus intends to inform the market in due course of the determination of a preferred partner. The financial metrics for the gas sites are superior to that of the existing portfolio, and with an established entity who understands the demand and potential of the peaker market.
Plutus received notice on 27 August 2019 from the non-executive directors of Rockpool that its management of the existing Rockpool EIS funded sites is to be terminated, on a six-month notice period. The Board believes this will assist in accelerating the sale of the portfolio of six 20MW diesel sites, and one gas site in development, in which the Company retains a 44.5% equity stake. The Company will continue to retain the management of Attune Energy.
On 30 October 2019 the Company announced that, on 29 October 2019, Paul Lazarevic's service contract and consultancy agreement were terminated by the Company with immediate effect. Paul had been responsible for the Company's operations and was the Group's Operations Director. The Board is in discussions with prospective executive and non-executive directors to strengthen the board.
Share issues, brokers and NOMAD
In mid-November 2018, we raised GBP500,000 gross through the issue of 83,333,333 ordinary shares of 0.1 pence each ("Ordinary Shares") at an issue price of 0.6 pence per share in a placing conducted by Turner Pope Investments ("TPI") Limited. (the "Placing"). The Company also issued 18,000,000 Ordinary Shares in lieu of fees. The net proceeds of the Placing will be utilised in the development of wholly owned gas peaker sites and for general working capital purposes. The Issue Price represented a discount of 11.1 per cent. to the mid-market closing price of 0.0675 pence on 13 November 2018. Additionally. The Company is issuing 18,000,000 ordinary shares of 0.1 pence each, at the Issue Price, in lieu of fees. the New Ordinary Shares represent approximately 12.3 per cent. of the Company's issued share capital as enlarged by the New Ordinary Shares. Contemporaneously, Turner Pope Investments ("TPI") Limited was appointed as the Company's joint broker.
On 23 July 2019, post year end, the Company issued 10,909,090 new ordinary shares of 0.1p each ("Ordinary Shares") (the "Fee Conversion Shares") to certain advisers of the Company in lieu of professional services provided to the Company and 36,363,636 new ordinary shares to the convertible loan note holder in satisfaction of the outstanding GBP100,000 of unsecured convertible loan notes originally issued by the Company on 18 December 2014 (the "Debt Conversion Shares"), being a total of 47,272,726 shares. The Fee Conversion Shares and Debt Conversion Shares were issued at a price of 0.275p per share being the mid-market closing price on 15 July 2019. In June 2019, the directors were pleased to announce the appointment of Allenby Capital Limited as the Company's Nominated Adviser and Joint Broker.
Outlook
The board is concentrating on the Collaboration Agreement that has been signed with the investment adviser and managers of an infrastructure fund to finance the equity portion of an initial 80MW of gas sites; accordingly, we have already received indicative term sheets for debt funding. The board now seeks to dovetail the structure, and equity and debt funding of the gas sites working together with our infrastructure fund partner in order that we may proceed in a timely manner. Whilst there can be no guarantee, the ultimate sale of the legacy Rockpool interests will also add to our cash resources and assist in developing the plan for our gas pipeline.
James Longley
Interim Chief Executive Officer
31 October 2019
Financial Review
The Group is actively seeking to arrange suitable finance for the development of gas sites and is looking for an exit from its FlexGen sites
The year ended 30 April 2019 is our fourth full year of operations in the business of the development and operation of flexible energy generation projects, which play a crucial role in the changing UK energy mix as renewable generation replaces carbon intensive generation. We have been, throughout the year, endeavouring to advance our plans for the development of our planned gas site portfolio and have received strong expressions of interest for the debt portion and we recently announced post the year end that via DWPF, our finance partner, we had agreed to collaborate with a leading infrastructure fund on the development of a portfolio of gas "peaker" sites on a site-by-site basis. Whilst our gas projects are not reliant on the Capacity Mechanism, the re-instatement by the European Commission is welcome news as it lifts a shadow over the whole industry and will relieve the market for finance for gas projects such as ours.
Until the half year ended 31 October 2018, we had nine management contracts in place with Rockpool investee companies, each generating GBP150,000 per annum at which time, in order to assist in relieving cash flow in the investee companies, we agreed to vary the fees received with the balance being accrued. The changes are that from 1 November 2018, Attune Energy Limited is to continue to receive its normal monthly fee of GBP12,500 per month plus VAT, the other five FlexGen sites are 50% of normal fees i.e. GBP6,250 per month each and the remaining three investee companies, which are to develop one 20MW gas site together, are to be revised to GBP250,000 per annum in total, 100% of which is to be accrued. We therefore have an accrual of GBP312,500 at the year-end in the statement of financial position.
Plutus, through its subsidiary, Plutus Energy Limited, is owed to 30 April 2019 GBP337,500 in accrued and deferred fees from the six co-invested companies. Plutus anticipates accruing, under the existing management agreements, a further GBP482,812 in management fees during the remainder of the notice period up to February 2020. The directors of Plutus are working towards the dovetailing of the end of the management contracts with the commencement of the development of the new gas Peakers portfolio. The directors had previously reported that certain management fees are being accrued due to the delay in CM payments and the temporary suspension of the CM market pending resolution of certain reviews. Accordingly, the directors have been matching these accruals with regard to their directors' fees to maintain a cash flow equilibrium and therefore the directors are confident that they have sufficient resources under the current cash burn to implement their current plans. However, to preserve cash and to err on the side of caution, the directors of Plutus have agreed not to take any fees from 1 November 2019 until such time as the six FlexGen sites are sold or the funding comes through for the gas sites and there are sufficient funds to enable the directors to be paid. The directors have undertaken an impairment review of our investments in the Rockpool co-investee companies and have decided that it would be inappropriate to impair them at his time particularly in view of the return of the Capacity Market Mechanism, discussed above. We continue to explore opportunities to maximise the value of our six FlexGen sites, with a view to an eventual sale.
The directors have performed an annual review on the goodwill created on the acquisition of Plutus Energy Limited by Plutus Powergen PLC in 2014. In previous years we have taken the forecast cashflows for the following 5 years which have always shown a profit and discounted them back. This calculation has always justified the position that the goodwill did not need to be impaired. However, following the co-investee companies giving us 6 months termination notice our projections show diminishing cash flow from Plutus Energy's current operations and therefore the goodwill needs to be written down to zero, which is a write off of GBP1,085,000 in the year ended 30 April 2019 (2018: Nil). Whilst we have every confidence that we can raise funds to set up new gas-powered "peaker" sites, the directors feel that it is prudent to write down the goodwill to zero this year. It is compounded by the general market given recent announcements.
In mid-November 2018, we raised GBP500,000 gross, for working capital purposes and to assist in the development of gas "peaker" sites, through the issue of 83,333,333 ordinary shares at an issue price of 0.6 pence per share in a placing conducted by Turner Pope Investments Limited. The Company also issued 18,000,000 Ordinary Shares in lieu of fees. On 23 July 2019, post year end, the Company issued 10,909,090 new ordinary shares of 0.1p each to certain advisers of the Company in lieu of professional services provided to the Company and 36,363,636 new ordinary shares to the convertible loan note holder in satisfaction of the outstanding GBP100,000 of unsecured convertible loan notes being a total of 47,272,726 shares. The Fee Conversion Shares and Debt Conversion Shares were issued at a price of 0.275p per share.
During the year under review, revenue reduced from the management contracts with the Rockpool investee companies because of the reduction in fees receivable by GBP75,000 as we agreed a lower amount with the final three investee companies to manage the one gas site to be built therefore turnover during the year was GBP1,275,000 (2018: GBP1,350,000). Administrative expenses have increased to GBP2,793,293 (2018: GBP1,513,022). This includes the figures for the write of goodwill detailed above of GBP1,085,000, together with the write off of pre-planning project expenses of GBP128,550 (2018: GBP50,153) in the year under review. The latter mostly relates to write off of the expense of developing the Woodbury gas sites as detailed in the Chief Executive Review. Taxation is GBP0 for the year ended 30 April 2019 (2018: Nil) and consequently the basic and diluted loss per share from continuing operations was substantially higher at 0.22p (2018: 0.08p). Share based payments were considerably lower this year due the expensed being determined by reference to the fair value of the options granted spread over the vesting period.
Cash was GBP45,177 at the year-end (2018: GBP136,416). We are owed at the year-end GBP337,500 in accrued fees (GBP2018: nil) Our much-reduced ongoing overheads will be covered by management fees with directors taking no further salaries as discussed above. We will continue to manage cash flow, accounts receivable and accounts payable in a fair and reasonable manner within the Group resources and within our existing agreements with the co-investee companies. All efforts are concentrating on the run off of the management contracts for the operating sites and achieving funding for the gas sites.
Group net liabilities/(assets) at the year-end were GBP95,364 (2018: 1,013,657), due largely to the write off of the goodwill in the balance sheet attributable to the original purchase of Plutus Energy Limited in 2014 and partly due to the losses in the year, including a write off of all costs of gas sites being developed in house. The borrowings of GBP100,000 at the year-end were converted into ordinary shares of the Company post year end.
Key performance indicators
The key performance indicators are set out below:
Hot Features
Premium
2018 2019 Change %
-------------------------- ------------ ------------ --------------
Turnover GBP1,350,000 GBP1,275,000 -5.5%
Cash and cash equivalents GBP136,416 GBP45,177 -68%
Closing share price 1.23p 0.34p -72%
Earnings per share (0.08)p (0.22)p -275%
-------------------------- ------------ ------------ --------------
Principal risks and uncertainties
The Board regularly reviews the risks facing the Company and seeks to exploit, avoid or mitigate those risks as appropriate.
Financial risk management objectives and policies
Financial risk management objectives and policies of the Company are set out in note 24 to the financial statements.
James Longley
Director
31 October 2019
GROUP STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 April 2019
2019 2018
Note GBP GBP
----------------------------------------- ------ ------------------ -------------
Continuing operations
Revenue 1,275,000 1,350,000
----------------------------------------- ------ ------------------ -------------
Gross profit 1,275,000 1,350,000
Administrative expenses (1,579,744) (1,513,022)
Share based payments (124,408) (289,338)
Other operating expenses 7 (128,549) (50,153)
Impairment of goodwill 12 (1,085,000) -
----------------------------------------- ------ ------------------ -------------
Operating loss (1,642,701) (502,513)
Interest charge on loan note 16 (8,000) (12,000)
Other interest payable - (52,670)
----------------------------------------- ------ ------------------ -------------
Loss before tax 5 (1,650,701) (567,183)
Tax 8 - -
----------------------------------------- ------ ------------------ -------------
Net loss attributable to equity holders
of the Company and total comprehensive
loss (1,650,701) (567,183)
----------------------------------------- ------ ------------------ -------------
Earnings per share (pence per share):
Basic and diluted loss per share from
continuing and total operations 9 (0.22)p (0.08)p
----------------------------------------- ------ ------------------ -------------
There are no items of other comprehensive income and hence not disclosed.
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent company pro t and loss account. The total comprehensive loss for the parent company for the year was GBP1,510.396. (2018: loss of GBP499,350).
GROUP AND COMPANY STATEMENTS OF FINANCIAL POSITION
FOR THE YEARED 30 APRIL Group Company
2019
----------------- ----------- ------------------------
2019 2018 2019 2018
Note GBP GBP GBP GBP
---------------------------------- ------ ----------------- ----------- ----------- -----------
Non-current assets
Goodwill 12 - 1,085,000 - -
Investments in subsidiaries 10 - - 13,333 1,098,333
Investments 11 152 152 152 152
---------------------------------- ------ ----------------- ----------- ----------- -----------
152 1,085,152 13,485 1,098,485
---------------------------------- ------ ----------------- ----------- ----------- -----------
Current assets
Trade and other receivables 13 475,238 146,627 880,898 368,017
Cash and cash equivalents 14 45,177 136,416 44,988 78,207
---------------------------------- ------ ----------------- ----------- ----------- -----------
520,415 283,043 925,886 446,224
---------------------------------- ------ ----------------- ----------- ----------- -----------
Total assets 520,567 1,368,195 939,371 1,544,709
Current liabilities
Trade and other payables 15 (325,203) (254,538) (236,452) (64,309)
Borrowings 16 (100,000) (100,000) (100,000) (100,000)
---------------------------------- ------ ----------------- ----------- ----------- -----------
(425,203) (354,538) (336,452) (164,309)
---------------------------------- ------ ----------------- ----------- ----------- -----------
Net current (liabilities)/assets 95,212 (71,495) 589,434 281,915
---------------------------------- ------ ----------------- ----------- ----------- -----------
Non-current liabilities
Borrowings 16 - - - -
---------------------------------- ------ ----------------- ----------- ----------- ----------- Total liabilities (425,203) (354,538) (336,452) (164,309) ---------------------------------- ------ ----------------- ----------- ----------- ----------- Net assets 95,364 1,013,657 602,919 1,380,400 ---------------------------------- ------ ----------------- ----------- ----------- ----------- Equity Share capital 17 1,630,784 1,529,450 1,630,784 1,529,450 Share premium account 18 7,748,243 7,241,576 7,748,243 7,241,576 Share option and warrant reserve 19 570,036 445,628 570,036 445,628 Loan note equity reserve 21 23,657 23,657 23,657 23,657 Retained losses 22 (9,877,356) (8,226,654) (9,369,800) (7,859,911) ---------------------------------- ------ ----------------- ----------- ----------- ----------- Equity attributable to owners of the Company 95,364 1,013,657 602,920 1,380,400 ---------------------------------- ------ ----------------- ----------- ----------- -----------
The financial statements of Plutus PowerGen plc, registered number 5859612, were approved by the Board of Directors and authorised for issue on 31 October 2019
They were signed on its behalf by:
Share Loan
Share Share option note Retained
capital premium reserve equity losses Total
GBP GBP GBP reserve GBP GBP
GBP
--------------- -------------- ------------- ----------- -------------- ------------------------ ---------------
At 30 April
2017 1,496,950 6,994,076 140,652 23,657 (7,659,471) 1,166,089
--------------- -------------- ------------- ----------- -------------- ------------------------ ---------------
Comprehensive
income for
the
year - - - - (567,183) (567,183)
Credit to
equity
in respect of
share-based
compensation
charge - - 304,976 - - 304,976
Issue of share
capital 32,500 247,500 - - - 280,000
--------------- -------------- ------------- ----------- -------------- ------------------------ ---------------
At 30 April
2018 1,529,450 7,241,576 445,628 23,657 (8,226,654) 1,013,657
--------------- -------------- ------------- ----------- -------------- ------------------------ ---------------
Comprehensive
income for
the
year - - - - (1,650,701) (1,650,701)
Credit to
equity
in respect of
share-based
compensation
charge - - 124,408 - - 124,408
Issue of share
capital 101,333 506,667 - - - 608,000
--------------- -------------- ------------- ----------- -------------- ------------------------ ---------------
At 30 April
2019 1,630,784 7,748,243 570,036 23,657 (9,877,355) 95,364
--------------- -------------- ------------- ----------- -------------- ------------------------ ---------------
James Longley
Director
GROUP STATEMENT OF CHANGES IN EQUITY
For the year ended 30 April 2019
Share Loan
Share Share option note Retained
capital premium reserve equity losses Total
GBP GBP GBP reserve GBP GBP
GBP
--------------- -------------- ------------- ----------- -------------- ------------------------ ---------------
At 30 April
2017 1,496,950 6,994,076 140,652 23,657 (7,659,471) 995,864
--------------- -------------- ------------- ----------- -------------- ------------------------ ---------------
Comprehensive
income for
the
year - - - - (567,183) (567,183)
Credit to
equity
in respect of
share-based
compensation
charge - - 304,976 - - 304,976
Issue of share
capital 32,500 247,500 - - - 280,000
--------------- -------------- ------------- ----------- -------------- ------------------------ ---------------
At 30 April
2018 1,529,450 7,241,576 445,628 23,657 (8,226,654) 1,013,657
--------------- -------------- ------------- ----------- -------------- ------------------------ ---------------
Comprehensive
income for
the
year - - - - (1,650,701) (1,650,701)
Credit to
equity
in respect of
share-based
compensation
charge - - 124,408 - - 124,408
Issue of share
capital 101,333 506,667 - - - 608,000
--------------- -------------- ------------- ----------- -------------- ------------------------ ---------------
At 30 April
2019 1,630,784 7,748,243 570,036 23,657 (9,877,355) 95,364
--------------- -------------- ------------- ----------- -------------- ------------------------ ---------------
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 April 2019
Share Loan
Share Share option note Retained
capital premium reserve equity losses Total
GBP GBP GBP reserve GBP GBP
GBP
--------------- ------------- ------------- ----------- -------------- ------------------------ ----------------
At 30 April
2017 1,496,950 6,994,076 140,652 23,657 (7,360,561) 1,294,774
--------------- ------------- ------------- ----------- -------------- ------------------------ ----------------
Comprehensive
income
for the year - - - - (499,350) (499,350)
Credit to
equity
in respect of
share-based
compensation
charge - - 304,976 - - 304,976
Issue of share
capital 32,500 247,500 - - - 280,000
--------------- ------------- ------------- ----------- -------------- ------------------------ ----------------
At 30 April
2018 1,529,450 7,241,576 445,628 23,657 (7,859,911) 1,380,400
--------------- ------------- ------------- ----------- -------------- ------------------------ ----------------
Comprehensive
income
for the year - - - - (1,510,396) (1,510,396)
Credit to
equity
in respect of
share-based
compensation
charge - - 124,408 - - 124,408
Issue of share
capital 101,333 506,667 - - - 608,000
--------------- ------------- ------------- ----------- -------------- ------------------------ ----------------
At 30 April
2019 1,630,784 7,748,243 570,036 23,657 (9,370,307) 602,920
--------------- ------------- ------------- ----------- -------------- ------------------------ ----------------
GROUP AND COMPANY STATEMENTS OF CASH FLOW
For the year ended 30 April 2019
Group Company
---------------------- --------------- ------------------ ------------------
2019 2018 2019 2018
Note GBP GBP GBP GBP
----------------------- ------ ---------------------- --------------- ------------------ ----------------
Net cash generated
by/(used
in) operating
activities 26 (603,209) (50,523) (133,098) (203,234)
----------------------- ------ ---------------------- --------------- ------------------ ----------------
Investing activities
Net repayments
by/(advances
to) subsidiary
undertaking - - (421,128) 94,502
----------------------- ------ ---------------------- --------------- ------------------ ----------------
Net cash generated
from/(used
in) investing
activities - - (421,128) 94,502
----------------------- ------ ---------------------- --------------- ------------------ ----------------
Financing activities
Proceeds of share
issues 519,970 180,000 519,970 180,000
Interest paid (8,000) (64,670) (8,000) (64,670)
----------------------- ------ ---------------------- --------------- ------------------ ----------------
Net cash (used
in)/generated
from financing
activities 511,970 115,330 511,970 115,330
----------------------- ------ ---------------------- --------------- ------------------ ----------------
Net
increase/(decrease)
in cash and cash
equivalents (91,239) 64,807 (33,219) 6,598
Cash and cash
equivalents
at beginning of year 136,416 71,609 78,207 71,609
----------------------- ------ ---------------------- --------------- ------------------ ----------------
Cash and cash
equivalents
at end of year 15 45,177 136,416 44,988 78,207
----------------------- ------ ---------------------- --------------- ------------------ ----------------
Major non-cash transactions
Year ended 30 April 2019
During the year the Group issued shares for services with the value of GBP88,000 (2018: GBPnil).
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 April 2019
1 - GENERAL INFORMATION
Plutus PowerGen plc is a Company incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is given on page 24. The nature of the Group's operations and its principal activities are set out in the Strategic Report on pages 10 to 11 and in the Chairman's Statement on pages 3 to 6.
2 - Summary of significant accounting Policies
The principal accounting policies applied in the preparation of these Financial Statements are set out below ('Accounting Policies' or 'Policies'). These Policies have been consistently applied to all the periods presented, unless otherwise stated.
Basis of preparing of financial statements
The Consolidated Financial Statements of the Group have been prepared in accordance with International Financial Reporting Standards ('IFRS') and IFRIC Interpretations Committee ('IFRS IC') as adopted by the European Union and the Companies Act 2006 applicable to companies reporting under IFRS. The Financial Statements have also been prepared under the historical cost convention.
The Financial Statements are presented in pounds sterling which is the currency of the primary economic environment in which the Group operates.
The preparation of Financial Statements in conformity with IFRS's requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Information are disclosed in Note 3.
New standards and interpretations
(a) New and amended standards mandatory for the first time for the financial periods beginning on or after 1 May 2018 as of 1 May 2018 the Group has adopted IFRS 9 and IFRS 15.
The Group adopted IFRS 9, Financial Instruments ('IFRS 9'), which replaced IAS 39, Financial Instruments: Recognition and Measurement. IFRS 9 addresses the classification, measurement and recognition of financial assets and liabilities.
The Group reviewed the financial assets and liabilities reported on its Statement of Financial Position and completed an assessment between IAS 39 and IFRS 9 to identify any accounting changes. The financial assets subject to this review were trade and other receivables and financial assets held at fair value through profit or loss. The financial liabilities subject to this review were the trade and other payables. Based on this assessment of the classification and measurement model, there were no changes to classification and measurement other than changes in terminology.
IFRS 15 requires an expected quantitative impact of the application of IFRS 15 to be included within the financial statements. Management service income recognition is not considered to change as a result of the transition to IFRS 15. The Group has no other revenue sources.
Of the other IFRSs and IFRICs adopted, none have had a material effect on future Groups Financial Statements.
Standard Impact on initial application Effective date
IFRS 16 Leases 1 January 2019
IFRS 9 (Amendments) Prepayment features with negative compensation 1 January 2019
IAS 28 (Amendments) Long term interests in associates and joint ventures 1 January 2019
2015-2017 Cycle Annual improvements to IFRS Standards 1 January 2019
IFRS 3 (Amendments) Business combinations *1 January 2020
* Subject to EU endorsement
The Group is evaluating the impact of the new and amended standards above. The Directors believe that these new and amended standards are not expected to have a material impact on the Group's results or shareholders' funds.
BASIS OF CONSOLIDATION
The Group's consolidated financial statements incorporate the financial statements of Plutus PowerGen plc (the "Company") and entities controlled by the Company (its subsidiaries). Subsidiaries are entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de- consolidated from the date that control ceases.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.
Going Concern
The Consolidated Financial Statements have been prepared on a going concern basis. The Group's assets are not generating revenues, an operating loss has been reported and an operating loss is expected to be incurred in the 12 months subsequent to the date of these Financial Statements. As a result, the Group will need to raise funds to provide working capital.
Based on the Board's budgets, cash flow forecasts and considered ability to raise further finance, the Directors are of the view that the Group has sufficient funds to undertake its operating activities over the next 12 months from the date these financial statements are approved. As result, they continue to adopt the going concern basis of accounting in preparing the annual financial statements for the year ended 30 April 2019.
Should the Group be unable to continue as a going concern, adjustments would have to be made to reduce the value of the assets to their recoverable amounts, to provide for further liabilities which might arise and to classify non-current assets as current. The Financial Statements do not include the adjustments that would result if the Group was unable to continue in operation.
The auditors have made reference to going concern by way of a material uncertainty paragraph within their report.
TAXATION
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the year end date.
Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each year end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and where they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
REVENUE
IFRS 15 was adopted from 1 January 2018. There were no material changes to the revenue arising from the adoption.
Revenue is measured at the fair value of the consideration received or receivable, and represent amounts receivable for services supplied, stated net of value added taxes. Under IFRS 15 there is a five-step approach to revenue recognition which is adopted across all revenue streams. The process is:
Step 1: Identify the agreement with the entity;
Step 2: Identify the performance obligations in the agreement;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations in the agreement; and
Step 5: Recognise revenue as and when the entity satisfies the performance obligation.
The Group generates revenue from the provision of management services which are invoiced on a monthly basis and are recognised in the period to which they relate.
The balance sheet is debited with sales mentioned above, as accrued income, which will then be received on the criteria detailed in the management agreements. At the balance sheet date, the carrying value for accrued income reflects the total value of sales which has been recognised as revenue but are not yet received.
FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to
the contractual provisions of the instrument.
(a) Classification
The Company classifies its financial assets in the following categories: at fair value through profit or loss and amortised cost including loans and receivables. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading and include investments in listed and unlisted equities. Details of these assets and their fair value is included in note 3.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The Company's loans and receivables comprise other receivables and prepayments' and 'cash and cash equivalents' in the Statement of Financial Position. Loans and receivables are initially measured at the transaction cost and subsequently held at amortised cost.
The Company applies the IFRS 9 simplified model of recognising lifetime expected credit losses for other receivables which principally comprise of sundry debtors and prepayments. The recoverability of these amounts is reviewed on an ongoing basis. In measuring the expected credit losses, the receivables have been assessed on a collective basis as they possess shared credit risk characteristics.
(b) Recognition and measurement
Regular purchases and sales of financial assets are recognised on the trade-date, being the date on which the Company commits to purchase or sell the asset. Investments are initially recognised at fair value with transaction costs expensed for all financial assets.
Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the Income Statement. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.
Financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method.
Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are presented in the Statement of Comprehensive Income within 'Other (losses)/gains - net' in the period in which they arise.
Dividends on available-for-sale equity instruments are recognised in the Statement of Comprehensive Income as part of income when the Company's right to receive payments is established, which is in line with the Company's revenue recognition policy.
(c) Impairment of financial assets
The Company assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. A significant or prolonged decline in the fair value of equity investments and securities below its cost is evidence that the assets are impaired. If any such evidence exists the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss - is recognised in profit or loss.
Derecognition of financial assets and liabilities
Financial assets
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:
- the rights to receive cash flows from the asset have expired;
- the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a 'pass through' arrangement; or
- the Company has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.
Trade and other receivables
Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash in hand and bank balances.
Borrowings
Borrowings represent convertible loans that are accounted for as compound instruments. The fair value of the liability portion of the convertible loan notes is determined using a market interest rate for an equivalent non-convertible loan note. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the loan notes. The remainder of the proceeds is allocated to the conversion option, which is recognised and included in shareholders' equity, net of tax effects, and is not subsequently re-measured.
SHARE-BASED PAYMENTS
The Group operates a number of equity-settled, share-based schemes, under which the Group receives services from employees or third-party suppliers as consideration for equity instruments (options and warrants) of the Group. The fair value of the third-party suppliers' services received in exchange for the grant of the options is recognised as an expense in the Income Statement or charged to equity depending on the nature of the service provided. The value of the employee services received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted, including non-market based vesting conditions.
The fair value of the share options and warrants are determined using the Black Scholes valuation model.
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Income Statement or equity as appropriate, with a corresponding adjustment to a separate reserve in equity.
When the options are exercised, the Group issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the options are exercised.
Options or warrants issued to investors are not valued as they do not represent a service performed for the Company. However, the relevant disclosures are made for users to obtain an understanding of the options that may be potentially dilutive in the future.
3 - CRITICAL ACCOUNTING ESTIMATION AND JUDGEMENTS
The preparation of the Financial Statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Financial Statements and the reported amount of expenses during the year. Actual results may vary from the estimates used to produce this Financial Statements.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The following are the key estimates and judgements that have a significant risk of resulting in a material adjustment within the next year:
(i) Fair value of financial assets - level 3
The Company reviews the fair value of its unquoted equity instruments at each Statement of Financial Position date. This requires management to make an estimate of the value of the unquoted securities in the absence of an active market. See note 11 for detail on the Level 3 valuation process.
(ii) Financial assets held at fair value through profit or loss
Level 3 financial assets held at fair value through profit or loss have a carrying value of GBP151 at 30 April 2019 . An impairment charge of GBPNil (2018: GBPNil) has been recognised in the year.
The Company follows the guidance of IFRS 9 to determine when an investment at fair value through profit or loss is impaired. This determination requires significant judgement. In making this judgement, the Company evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of the short-term business outlook for the investee, including factors such as industry and sector performance and operational and financing cash flow. Management also consider external indicators such as commodity prices, investment performance and demand for the underlying commodity. As per note 2, financial assets held at fair value through profit or loss are assessed individually. Details of the assessment of each investment is included in note 12.
(iii) Share options
The Group has applied the requirements of IFRS 2 Share-based Payment for all grants of equity instruments.
The Group issues equity-settled share-based payments to the directors and senior management ("Employee Share Options"). Equity-settled share-based payments are measured at fair value at the date of grant for Employee Share Options. The fair value determined at the grant date, of the equity-settled share-based payments is expensed, with a corresponding credit to equity, on a graded basis over the vesting period, based on the Group's estimate of shares that will eventually vest. At each subsequent reporting date the Group calculates the estimated cumulative charge for each award having regard to any change in the number of options that are expected to vest and the expired portion of the vesting period. The change in this cumulative charge since the last reporting date is expensed with a corresponding credit being made to equity. Once an option vests, no further adjustment is made to the aggregate amount expensed.
The fair value is calculated using the Black Scholes method for Employee Share Options as management views the Black Scholes method as providing the most reliable measure of valuation. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability exercise restrictions and behavioural considerations. The market price used in the model is the issue price of Company shares at the last placement of shares immediately preceding the calculation date. The fair values calculated are inherently subjective and uncertain due to the assumptions made and the limitation of the calculations used.
(iv) Impairment of goodwill
The determination of fair values of assets acquired and liabilities assumed in a business combination involves the use of estimates and assumptions such as discount rates used and valuation models applied as well as goodwill allocation.
Goodwill has a carrying value of GBPnil as at 30 April 2019 (2018: GBP1,085,000). The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in notes to the Financial Statements.
Management has concluded that an impairment charge was necessary to the carrying value of goodwill for the period ended 30 April 2019 of GBP1,085,000 (30 April 2018: GBPnil). See Note 12 to the Financial Statements.
4 BUSINESS SEGMENTS
In accordance with IFRS 8, the Group is required to define its operating segments based on the internal reports presented to its Chief Operating decision maker in order to allocate resources and assess performance. The Chief Operating decision maker is the Chief Executive. There is only one continuing class of business, being the investment in the natural resources sector.
Given that there is only one continuing class of business, operating within the UK, no further segmental information has been provided.
5 - LOSS FOR THE YEAR
Loss for the year from continuing operations has been arrived at after charging:
2019 2018
GBP GBP
----------------------------------------------------- --------- -----------
Operating lease expense in respect of property 112,490 97,157
Employee costs - including share-based compensation
costs (see note 7) 878,731 1,202,712
----------------------------------------------------- --------- -----------
The analysis of auditors' remuneration is as follows:
2019 2018
GBP GBP
--------------------------------------------------- -------------- --------
Fees payable to the Group's auditor for the audit
of the Group's annual
accounts 22,000 22,000
--------------------------------------------------- -------------- --------
Other services pursuant to legislation:
- tax services 1,750 1,750
--------------------------------------------------- -------------- --------
Total non-audit fees 1,750 1,750
--------------------------------------------------- -------------- --------
6 - EMPLOYEE COSTS (INCLUDING DIRECTORS)
2019 2018
GBP GBP
--------------------------------------------- ------- ---------
Salaries and fees 750,000 908,000
Employee share option charge 124,408 273,700
Employer's national insurance contributions 4,323 5,374
--------------------------------------------- ------- ---------
878,731 1,202,712
--------------------------------------------- ------- ---------
The average monthly number of employees (including Executive Directors) employed by the Group during the year was 5, all of whom were involved in management and administration activities (2018: 5).
Details of Directors' remuneration and gains on the exercise of share options can be found in the section of the Directors'
Remuneration Report on page 23 to 25.
7 - OTHER OPERATING EXPENSES
2019 2018
GBP GBP
--------------------------------------- ------- ------
Pre-planning project expenses written
off 128,549 50,153
--------------------------------------- ------- ------
128,549 50,153
--------------------------------------- ------- ------
A write off on pre-planning project expense incurred during the year as application for planning permission for the development of a double gas-powered site was initially rejected on the grounds of perceived poor air quality, subject to appeal.
8 - TAX
2019 2018
GBP GBP
------------- ----
Current tax - -
Deferred tax - -
------------- ----
- -
------------- ----
Corporation tax is calculated at 19% (2018: 19%) of the estimated assessable loss for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. The charge for the year can be reconciled to the profit per the statement of comprehensive income as follows:
Tax reconciliation
2019 2018
GBP GBP
------------------------------------------ ----------- ---------
Loss before tax (1,650,701) (567,183)
------------------------------------------ ----------- ---------
Tax at UK corporation tax rate of 19%
(2018: 19%) (313,633) (107,765)
Effects of:
Expenses not deductible for tax purposes 269,137 29,075
Tax losses carried forward 44,496 78,690
------------------------------------------ ----------- ---------
Total tax charge - -
------------------------------------------ ----------- ---------
The Group has tax losses carried forward of GBP3,306,578 (Apr 2018: GBP3,072,515) available under the current rules. Both are available to be offset against future gains and profits.
A deferred tax asset has not been recognised in respect of these losses in view of the uncertainty as to the level and timing of future taxable profits and gains.
9 - EARNINGS PER SHARE
2019 2018
GBP GBP
----------------------------------------------- ------ ------
Earnings per share - basic and diluted, pence
per share (0.22) (0.08)
----------------------------------------------- ------ ------
The basic earnings per share is calculated by dividing the loss attributable to equity holders after tax of GBP1,650,701 (2018- loss GBP567,183) by the weighted average number of shares in issue and carrying the right to receive dividend. For the year ended 30 April 2019 this was 766,683,273 (2018- 766,683,273) shares.
As the Group has incurred a loss for the year, no option or warrant is potentially dilutive, and hence the basic and diluted earnings per share are the same. At the current and prior year end, there were no share options outstanding that are potentially dilutive in the future.
10 - INVESTMENTS IN SUBSIDIARIES
The Group holds the following investments in subsidiary undertakings:
Country of Percentage of Principal
Subsidiary Incorporation ordinary shares activity
held
------------------------- ---------------------- -------------------- ------------------------
Plutus Energy Limited England and Wales 100% Management services
to the electricity
generating entities
(Note 11)
Electricity generation
NRS Power Limited England and Wales 100% (dormant)
Electricity generation
FC PowerGen Limited England and Wales 100% (dormant)
Electricity generation
KI Power Limited England and Wales 100% (dormant)
Electricity generation
LF FlexGen Limited England and Wales 100% (dormant)
Electricity generation
Swallow Energy Limited England and Wales 100% (dormant)
The carrying value of the investments in the Company is as follows:
2019 2018
GBP GBP
------------------------------------------ ----------- ---------
At 1 May 1,098,333 1,098,000
Reclassification of investment in Plutus - -
Energy Limited
Impairment of investments (1,085,000) -
------------------------------------------ ----------- ---------
13,333 1,098,333
------------------------------------------ ----------- ---------
11 - FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - NON CURRENT ASSETS
All investments are classified as Level 3 under the IFRS 7 fair value hierarchy as set out under Fair Value Measurements within Note 3.
As at 30 April 2019, the fair value of the 9 SPVs is based on cost of GBP151. The Directors consider this carrying value to equate to the fair value of this investment as the Capacity Market Mechanism market was suspended by the European Commission as this time which these entities operate in.
Group Company
---------------------- --------------- ------------------ -----------
2019 2018 2019 2018
GBP GBP GBP GBP
---------------------------- ---- ---------------------- --------------- ------------------ ---------
Brought forward 151 151 136* 151
Acquisition of investments - - - -
---------------------------- ---- ---------------------- --------------- ------------------ ---------
Carried forward 151 151 136 151
---------------------------------- ---------------------- --------------- ------------------ ---------
The details of investments classified as available for sale are as follows:
Country of Percentage of Principal
Investment Company Incorporation ordinary shares activity
held
----------------------- --------------------- -------------------- -----------------------
Attune Energy Limited England and Wales 45.5% Electricity generation
*
Flexible Generation England and Wales 44.9% Electricity generation
Limited
Balance Power Limited England and Wales 44.9% Electricity generation
Equivalence Energy England and Wales 45.0% Electricity generation
Limited
Precise Energy Limited England and Wales 45.1% Electricity generation
Valence Power Limited England and Wales 44.7% Electricity generation
Portman Power Limited England and Wales 45.3% Electricity generation
Reliance Generation England and Wales 45.6% Electricity generation
Limited
Selectgen Limited England and Wales 45.7% Electricity generation
*The investments held by the Company in 2018 was overstated by GBP15 as Attune Energy Limited is held by Plutus Energy Limited within the Group. No prior year adjustment is required due to the minimal impact on the accounts as all investments are held within the same Group controlled by Plutus Powergen PLC. Ownership of investments has been correctly disclosed in the statement of financial position current year.
12 - GOODWILL
2019 2018
GBP GBP
---------------------------------- ----------- ---------
Brought forward 1,085,000 1,085,000
Goodwill written off (1,085,000)
---------------------------------- ----------- ---------
Carried forward at 30 April 2019 - 1,085,000
---------------------------------- ----------- ---------
Goodwill arises on acquisition of a 100% of the equity of Plutus Energy Limited ("PEL").
The key input determining the recoverable amount as at 30 April 2019 was based on the termination of management agreement with the SPV investments, which relates to Plutus Energy Limited only revenue stream. Further detail is included in the director's financial review on page 10.
The Directors have reviewed the carrying value of goodwill as at 30 April 2019 and consider that the whole balance should be written off.
The Directors continue to review goodwill on an on-going basis and where necessary in future periods will request external valuations to further support the valuation basis.
13 - TRADE AND OTHER RECEIVABLES
Group Company
----------------------- ------- ---------------- -------------
2019 2018 2019 2018
GBP GBP GBP GBP
-------------------------------- ----------------------- ------- ---------------- -------------
Trade receivables 51,172 1,546 12,960 -
Amounts due from subsidiary
undertakings - - 659,496 313,368
Expenses rechargeable to
operating entities 5,747 19,144 - -
Other receivables 61,441 98,110 189,064 30,359
Prepayments and accrued income 356,878 27,827 19,378 24,290
-------------------------------- ----------------------- ------- ---------------- -------------
475,238 146,627 880,898 368,017
-------------------------------- ----------------------- ------- ---------------- -------------
The Directors consider the carrying amount of trade and other receivables approximates to their fair value.
14 - CASH AND CASH EQUIVALENTS
Group Company
---------------------- ----------- --------------- ------
2019 2018 2019 2018
GBP GBP GBP GBP
--------------------------- ---------------------- ----------- --------------- ------
Cash and cash equivalents 45,177 136,416 44,988 78,207
--------------------------- ---------------------- ----------- --------------- ------
45,177 136,416 44,988 78,207
--------------------------- ---------------------- ----------- --------------- ------
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value.
15 - TRADE AND OTHER PAYABLES
Group Company
----------------------- -------- ----------------- ------
2019 2018 2019 2018
GBP GBP GBP GBP
------------------------------ ----------------------- -------- ----------------- ------
Trade payables 200,417 133,728 111,943 8,195
Other payables 99,898 73,144 99,620 8,448
Accruals and deferred income 24,888 47,666 24,889 47,666
------------------------------ ----------------------- -------- ----------------- ------
325,203 254,538 236,452 64,309
------------------------------ ----------------------- -------- ----------------- ------
Trade payables and accruals principally comprise amounts outstanding for trade purchases and on-going costs. The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
16 - BORROWINGS
Group and Company
Convertible loans
The borrowings are comprised convertible loan notes. As of 1 May 2018, the Group adopted IFRS 9 with no adjustments required. During the year ended 30 April 2019, the financial instruments for Plutus Powergen PLC contain an embedded derivative. The net proceeds from the issue of the loan notes have been split between the liability element and an equity component, representing the fair value of the embedded option to convert the liability into equity of the Company.
The Directors estimate the fair value of the liability component of the loan notes at 30 April 2019 to be approximately
GBP100,000 (2018: GBP100,000). This fair value has been calculated by discounting the future cash flows at the market rate of and therefore these instruments continue to be held at amortised cost. The loan notes are repayable on demand. The notes payable consists of the following:
2019 2018
GBP GBP
------------------------------------------ ------- ---------
Liability component brought forward 100,000 200,000
Loan Notes converted to Equity - (100,000)
Interest charge for the period 8,000 12,000
Interest paid (8,000) (12,000)
------------------------------------------ ------- ---------
Liability component of convertible loans
at 30 April 2019 100,000 100,000
Other loans - -
------------------------------------------ ------- ---------
Total borrowings 100,000 100,000
------------------------------------------ ------- ---------
Current liabilities 100,000 100,000
Non-current liabilities - -
------------------------------------------ ------- ---------
100,000 100,000
------------------------------------------ ------- ---------
17 - SHARE CAPITAL
2019 2019 2018 2018
Number GBP Number GBP
----------------------------- ----------------------- --------- ------------- ---------
Issued and fully paid
Ordinary shares of GBP0.001
each 825,262,268 825,262 723,928,935 723,929
Deferred shares of GBP0.049
each 16,439,210 805,521 16,439,210 805,521
----------------------------- ----------------------- --------- ------------- ---------
Total 1,630,783 1,529,450
----------------------------- ----------------------- --------- ------------- ---------
Share issues
Nominal
value
Ordinary shares Number GBP GBP
------------------------------ ----------------------------- --------------------- -------
Issued ordinary shares on 30
April 2017 691,428,935 0.001 691,429
Issue of shares 32,500,000 0.001 32,500
------------------------------ ----------------------------- --------------------- -------
Issued ordinary shares on 30
April 2018 723,928,935 0.001 723,929
Issue of shares 101,333,333 0.001 101,333
------------------------------ ----------------------------- --------------------- -------
Issued ordinary shares on 30
April 2019 825,262,268 0.001 825,262
------------------------------ ----------------------------- --------------------- -------
On 30 November 2018 the following share issues took place:
-- 101,333,333 shares were issued for cash at 0.6p per share following a placing
18 - SHARE PREMIUM ACCOUNT
Share premium account GBP ------------------------------------------- --------- Balance at 30 April 2017 6,994,076 Premium arising on issue of equity shares 247,500 ------------------------------------------- --------- Balance at 30 April 2018 7,241,576 Premium arising on issue of equity shares 506,667 ------------------------------------------- --------- Balance at 30 April 2019 7,748,243 ------------------------------------------- ---------
19 - SHARE OPTION AND WARRANT RESERVE
GBP
---------------------------- -------
Balance at 30 April 2017 140,652
Share-based payment charge 304,976
---------------------------- -------
Balance at 30 April 2018 445,628
Share-based payment charge 124,408
---------------------------- -------
Balance at 30 April 2019 570,036
---------------------------- -------
21- LOAN NOTE EQUITY RESERVE
GBP
--------------------------------------------- ------
Balance at 30 April 2018, and 30 April 2019 23,657
--------------------------------------------- ------
22 - GROUP RETAINED LOSSES
GBP
--------------------------------- -----------
Balance at 30 April 2017 (7,659,471)
Comprehensive loss for the year (567,183)
--------------------------------- -----------
Balance at 30 April 2018 (8,226,654)
Comprehensive loss for the year (358,917)
--------------------------------- -----------
Balance at 30 April 2019 (8,585,571)
--------------------------------- -----------
23 - SHARE OPTIONS AND WARRANTS
Options
Total options granted to the Directors of the Company as at 30 April 2019 was 74,310,000 ordinary shares with a nominal value of 0.1 pence per share. These options vest over a period of three years from the date of the Grant, with a third of the options vesting on the first, second and third anniversaries of the Grant respectively. These options are exercisable for a period of ten years from the date of the Grant subject to the vesting conditions.
The fair value of the options was calculated using the Black-Scholes model.
The table below summarises the share options extant during the year:
Number Number of Exercisable
of Issued Exercised Lapsed options at Exercise
options in the in the in the at 30 30 April price Expiry
at 30 year year year April 2019 date
April 2019
2018
------------- --------- ------------ -------- ------------- ------------------------ --------------- ----------
9,540,000 - - - 9,540,000 9,540,000 0.675p 8.03.2023
------------- --------- ------------ -------- ------------- ------------------------ --------------- ----------
60,000,000 - - - 60,000,000 40,000,000 1.485p 19.05.2020
------------- --------- ------------ -------- ------------- ------------------------ --------------- ----------
69,540,000 49,540,000
------------- --------- ------------ -------- ------------- ------------------------ --------------- ----------
Warrants
The table below summarises the share warrants extant during the year:
Number of Number Exercisable
warrants Issued Exercised Lapsed of at Exercise Vesting Expiry
at 30 April in the in the in the warrants 30 April price date date
2018 year year year at 30 2018
April
2019
------------ --------- ------------ -------- ---------- ----------------------- --------------- ------------------ -------------
30,075,207 - - - 30,075,207 - 1.15p 27.05.2018 27.05.2021
------------ --------- ------------ -------- ---------- ----------------------- --------------- ------------------ -------------
30,075,207 - - - 30,075,207 -
------------ --------- ------------ -------- ---------- ----------------------- --------------- ------------------ -------------
24 - FINANCIAL INSTRUMENTS
Categories of financial instruments
Carrying value
2019 2018
GBP GBP
----------------------------------------------- ------- -------
Financial assets
Investments held at fair value through profit
or loss 152 152
Trade receivables 51,173 1,546
Cash and cash equivalents 45,177 136,416
----------------------------------------------- ------- -------
96,502 138,114
----------------------------------------------- ------- -------
Financial liabilities at amortised cost:
Convertible unsecured loan notes 100,000 100,000
Trade and other payables 325,203 254,538
----------------------------------------------- ------- -------
425,203 354,538
----------------------------------------------- ------- -------
25 - RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group's finance function monitors and manages the financial risks relating to the operations of the Group. These
risks include credit risk, liquidity risk and cash flow interest rate risk.
The Group seeks to minimise the effects of these risks, in accordance with the Group's policies approved by the Board of Directors, which provide written principles on interest rate risk, credit risk and the investment of excess liquidity. The Group does not enter into or trade financial instruments, including derivative financial instruments, for any purpose.
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are:
-- to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholder;
-- to support the Group's growth; and -- to provide capital for the purpose of strengthening the Group's risk management capability.
The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. The capital structure consists of capital and reserves and convertible loan notes, for capital management purposes.
INTEREST RATE RISK
The Group's exposure to interest rate risk is limited to the interest payable on the convertible unsecured loan notes, which are at fixed rates of interest.
CREDIT RISK
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group's principal financial assets are bank balances and cash and other receivables.
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
LIQUIDITY RISK
Ultimate responsibility for liquidity risk management rests with the Board of Directors. The Group manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
The directors concluded it was not necessary to carry out any sensitivity analysis as it would only have an immaterial impact.
26 - NOTES TO THE CASH FLOW STATEMENT
Group Company
----------------------- ---------------- ------------------ -------------
2019 2018 2019 2018
GBP GBP GBP GBP
------------------------------------ ----------------------- ---------------- ------------------ -------------
(Loss)/profit before tax (1,650,701) (567,183) (1,435,396) (499,350)
Share-based compensation
charge 124,408 304,976 124,408 304,976
Interest payable 8,000 64,670 8,000 64,670
Goodwill written off 1,085,000 - 1,085,000 -
Project expenses written
off 128,549 50,153 - 50,153
Operating cash flow before
movements in working capital (304,744) (147,384) (217,988) (79,551)
Decrease/(increase) in receivables (457,159) 71,958 (166,753) (56,801)
Increase/(decrease) in payables 158,694 24,903 251,643 (66,882)
------------------------------------ ----------------------- ---------------- ------------------ -------------
Net cash generated by/(used
in) operating activities (603.209) (50,523) (133,098) (203,234)
------------------------------------ ----------------------- ---------------- ------------------ -------------
Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less.
Net Debt
Group Company
----------------------- ---------------- ------------------ -----------
2019 2018 2019 2018
GBP GBP GBP GBP
------------------------------ ----------------------- ---------------- ------------------ -----------
Cash and cash equivalents 45,177 136,416 44,988 78,207
Borrowings due within 1 year (100,000) (100,000) (100,000) (100,000)
Net Debt (54,823) 36,416 (55,012) (21,793)
27- OPERATING LEASE ARRANGEMENTS
The Group and Company as lessee
2019 2018
GBP GBP
-------------------------------------------------------------------------- ---------------- --------------
Minimum lease payments
as an expense in the
year under operating leases recognised 112,490 97,157
------------------------ -------- ------------ --------- ------------- ---------------- --------------
Minimum future lease payments under non-cancellable operating lease agreements:
2019 2018
GBP GBP
------------------- ----- ------------
Due within 1 year 3,100 47,700
------------------- ----- ------------
28- RELATED PARTY TRANSACTIONS
Remuneration of key management personnel
The Directors of the Group are considered to be Key Management Personnel. No pension benefits are provided for any Director and all relate to short term employee benefits.
Short Share Based Total Total
term benefits Payment 30 June 30 June
2019 2018
GBP GBP GBP GBP
-------------- ----------- -------- ---------------
Charles Tatnall 188,000 31,102 219,102 304,925
-------------- ----------- --------
James Longley 188,000 31,102 219,102 304,925
-------------- ----------- --------
Philip Stephens (deceased) 114,000 31,102 145,102 268,425
-------------- ----------- --------
Paul Lazarevic (resigned 18/10/2019) 218,000 31,102 249,102 268,425
-------------- ----------- --------
Tim Cottier 35,000 - 35,000 35,000
-------------- ----------- --------
660,000 124,408 867,408 1,181,700
-------------- ----------- --------
For further details in respect of the share-based payments see note 23.
During the year ended 30 April 2019 GBP167,000 (2018: GBP215,500) fees were paid to Tatbels Limited in respect of Charles
Tatnall's services as Executive Chairman.
During the year ended 30 April 2019, fees of GBP167,000 (2018: GBP215,500) were paid to Dearden Chapman Accountants Limited in respect of James Longley's services as Chief Financial Officer.
During the year ended 30 April 2019, fees of GBP125,000 were paid to Apex Power Limited in respect of services rendered by Paul Lazarevic and fees of GBP179,000 were paid to Ennerco Limited in respect of services rendered by Phil Stephens and Paul Lazarevic. In 2018 fees of GBP358,000 were paid to Ennerco Limited in respect of services rendered by Phil Stephens and Paul Lazarevic. Phil Stephens and Paul Lazarevic were both directors of Ennerco Limited during the year.
During the year ended 30 April 2019 fees of GBP22,000 (2018: GBP22,000) were paid to Kinloch Corporate Finance Limited in
respect of Tim Cottier's services as an independent non-executive director and of which Tim Cottier was a director.
27 - EVENTS AFTER THE YEAR END
On Thursday 24th October 2019, the European Commission's ruled that the UK's electricity back-up system, known as the Capacity Market, does not break EU state aid rules. The Capacity Market is now able to resume its role as a tool for ensuring security of supply of electricity and enables the Government to pay the energy providers what they are owed.
All other material events have been discussed in the Chairman's and Chief Executive's Report.
+44 (0) 20 8720
Plutus PowerGen Plc 6562
Charles Tatnall, Executive Chairman
Allenby Capital Limited (Nominated Adviser +44 (0)20 3328
and Joint Broker) 5656
Nick Athanas
James Hornigold
Turner Pope Investments (TPI) Limited +44 (0)20 3621
(Joint Broker) 4120
Andy Thacker
St Brides Partners Limited (Financial +44 (0)20 7236
PR) 1177
Isabel de Salis
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR CKDDBFBDDAKN
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October 31, 2019 14:38 ET (18:38 GMT)
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